Though Baidu’s (BIDU) sales growth has been impressive over the years, the company’s stock has been volatile. Since the start of 2018, the shares of Chinese companies have been affected by trade wars, the broader market tech sell-off, and growth concerns.
Baidu stock fell ~10% in 2016 and then rose 41% in 2017. Last year, its stock fell close to 35%, and it’s up 8% in 2019. These fluctuations have meant that Baidu shares have generated absolute returns of just 6.2% in the last five years and -11% in the last three years.
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These returns are less than impressive considering the returns of the broader tech indexes and ETFs. The stock of peer JD.com (JD) has risen 50% since its IPO in May 2014, while Alibaba (BABA) stock is up almost 100% since September 2014. Sina (SINA) has risen 33% in the last five years.
Of the 33 analysts tracking Baidu, 19 have given it “buy” recommendations, 12 have given it “holds,” and two have given it “sells.” Analysts’ 12-month average price target for Baidu is $215.80, and their median estimate is $216. Baidu is trading at a discount of 26% to analysts’ median estimate.
What do the technical indicators say?
On April 18, Baidu closed the trading day at $171.02. Based on that price, the stock was trading as follows:
- 0.5% above its 100-day moving average of $170.12
- 0.8% above its 50-day moving average of $169.70
- 0.5% below its 20-day moving average of $171.92
MACD and RSI
Baidu’s 14-day MACD (moving average convergence divergence) is -4.05. A stock’s MACD marks the difference between its short-term and long-term moving averages. Baidu’s negative MACD score indicates a downward trading trend.
Baidu has a 14-day RSI (relative strength index) score of 49, which shows that its stock is trading marginally closer to oversold territory than to overbought territory. An RSI score of above 70 indicates that a stock is overbought, while an RSI score of below 30 indicates that a stock is oversold.
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